In brief
- A Labuan company is set up for business conducted internationally and is regulated by Labuan FSA. A Sdn Bhd is registered with SSM and is the usual choice for a business based in Malaysia.
- A Labuan company must be incorporated through a licensed Labuan trust company. A Sdn Bhd is registered through SSM's online system.
- Which one fits depends on where your customers, team and activity are, whether you need a licence, and your tax position.
Two different routes into Malaysia
Malaysia offers two main company routes. A Sdn Bhd is the standard private company, registered with SSM, the Companies Commission of Malaysia, and used for business based in Malaysia. A Labuan company is set up on the island of Labuan, which is Malaysia's midshore business and licensing jurisdiction, and is regulated by the Labuan Financial Services Authority (Labuan FSA). Labuan companies are typically used for trading, holding and consultancy activities that work across borders.
Side by side
The table shows the main published rules we looked at for each.
| Labuan company | Sdn Bhd (onshore) | |
|---|---|---|
| Regulator | Labuan FSA | SSM |
| How it is set up | Through a licensed Labuan trust company that you appoint as your incorporation agent | Online through SSM's MyCoID system |
| Company secretary | A resident secretary is required | Appointed within 30 days, and must be a Malaysian citizen or permanent resident |
| Records | Accounting and other records kept in Labuan | Registered office open and accessible in Malaysia |
| Costs | Government fees and professional costs, which differ by route | Government fees and professional costs, which differ by route |
| Licensed activities | Financial businesses such as fund management are licensed by Labuan FSA | Licences and approvals depend on the activity |
| Tax | Its own regime, with conditions | Its own regime, and it is not the same |
What the table does not tell you
The things that usually decide this are not in a rulebook, and neither is the full cost. Each route has its own government fees and professional costs, and we give you a clear fixed scope and price before you start. Where will your customers be, and who will you be dealing with? Where will your team and your office be? Does your activity need a licence? How will your tax position look under each route? And how do the two fit with your bank, your investors and your long-term plans? A Labuan company also has conditions to meet to keep its tax treatment, and those conditions are specific to the company. We look at all of this with you before recommending anything, and some businesses end up using both.
A simple way to think about it
- If most of your business is in Malaysia, the onshore route is usually the natural start.
- If your business trades, invests or advises across borders and you want a base in Malaysia, Labuan is worth a conversation.
- If your activity is a regulated financial one, the licence usually decides the route.
How we help
We set up both. We establish Labuan International Companies and guide clients through Labuan FSA licence applications, we handle Sdn Bhd incorporation, and we give you a clear recommendation in your consultation.
Sources
- Labuan FSA: Labuan companies
- Labuan FSA: Incorporation and registration procedures
- Labuan FSA: Revised fees schedule (effective 1 January 2026)
- SSM: Submitting incorporation particulars for a company
- SSM: Annual submission for companies
Talk to us about your plans
Tell us what you want to build and where. We will map out your options with you.
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